XRP's Low DEX Volume, TVL Raise Utility Concerns
1min read Concerns are mounting over the utility of the XRP network, as evidenced by its low decentralized exchange (DEX) trading volume and total value locked (TVL). Despite boasting a market capitalization of $137 billion, XRP's daily dex trade volume stands at a mere $44,000, with a total value locked of $80 million. This disparity raises questions about the network's practical use and its reliance on speculation rather than real-world utility.
XRP's network infrastructure also lags behind its competitors. With only 386 nodes and 96 validators, XRP pales in comparison to other leading cryptocurrencies like Bitcoin, which has nearly 22,000 nodes, and Ethereum, with 11,000 nodes. This limited network participation suggests a lack of interest from general crypto traders in the network's utility, further highlighting the speculative nature of XRP's market presence.
Despite these concerns, there is an alternative perspective to consider. Ripple, the company behind XRP, continues to establish itself as a key infrastructure provider for global banking institutions. Ripple's technology facilitates cross-border payments by reducing settlement times and lowering costs, attracting leading banks and financial service providers worldwide. This institutional focus drives interest in XRP, as it supports efficient liquidity management and plays a strategic role in modernizing global financial transactions.
However, the low trading volume on the XRP Ledger (XRPL) remains a concern. The network's volume in March was a mere $1.5 million, indicating a lack of real-world utility for its size. This raises questions about the sustainability of XRP's premium valuation and its future relevance in the cryptocurrency market. As Ripple navigates its role in global banking, the community must address these challenges to ensure the long-term viability of the XRP network.
